Another 75th anniversary

By Jay Jamison

I’m reading one of those books
everyone quotes but nobody reads. Friedrich Hayek was an Austrian
economist who left his homeland in 1931 to teach at the London School
of Economics. In the middle of World War II, he published in England,
“The Road to Serfdom.” I have come across so many references to
this little book that I finally decided to actually read it. In fact,
this year marks the 75th anniversary of its publication. Commentators
have compared this book with another book everyone quotes and no one
reads — Alexis de Tocqueville’s classic, “Democracy in America.”

In 1989, the Berlin Wall came down and
in 1991, the Soviet Union — which had been viewed by many elite
academics as something akin to an immovable force of nature —
collapsed. To many, this heralded the end of the socialist dream. Yet
here we are, 28 years after the demise of the USSR, with a slate of
national candidates promoting socialism of one kind or another. This
was foretold by Hayek, who worried in his book that after the hoped
for victory over the Nazis in World War II, the government of England
would retain the war footing system of national economic planning
when peace was finally achieved. His prediction proved prescient
because that is exactly what happened. Here in America, we have had
some similar national programs, each advertised as the war on this or
that — the war on poverty, the war on drugs, and other policies
modeled on national emergencies like the World War.

Oddly enough, after 9/11, the George W.
Bush administration did not ask Congress to transform America to a
war economy, when such a policy would have been completely justified,
even in the eyes of libertarians like Hayek.

Today, employers are begging for
qualified workers, inflation is in check and minorities — who for
decades had been hardest hit economically — are now experiencing
historically low levels of unemployment. Yet in spite of all of this,
we currently have national candidates openly selling socialism. Free
college education, free healthcare, and other promised subsidized
programs are on the giveaway menu. These among other promised
freebies are merely lures used by politicians to entice votes from
unsuspecting constituents.

As a matter of fact, the only thing
that is truly free is a gift from someone who has title to whatever
he or she is giving away. All other transfers come at a cost.
Politicians who promise free stuff are not giving away something to
which they are entitled. They are merely robbing Peter to pay Paul.

The reason there are now gas lines in
oil rich Venezuela is because the gasoline sold there is so heavily
subsidized by the government that the price of the final product is
below the cost of production. Remove the profit motive and you get
shortages. The socialist motto should be: “Everything’s free, but
unavailable.” Nobel Laureate Milton Friedman, who wrote the
introduction to the 1994 edition of “The Road to Serfdom,” is
often quoted as saying, “What would happen if socialism came to the
Sahara Desert? First nothing, then we would have a shortage of sand.”
Hayek’s book is partly a cautionary tale about the lures of a
planned economy, which give rise to the shortages currently
experienced in Venezuela and other places embracing the socialist
experiment. Seventy-five years after its first publication, Hayek’s
warning still rings true.